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Jeff Gordon
Aug 26, 2021 9:20PM ET
this is the end, the end, my friend
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🙌 It's Here: the Only Stock Screener You'll Ever Need Get Started
MEME ETF seeks to tap retail investor sentiment
Published Aug 26, 2021 05:02PM ET
Updated Aug 26, 2021 07:12PM ET
© Reuters. FILE PHOTO: A GameStop store is seen in the Jackson Heights neighborhood of New York City, New York, U.S. January 27, 2021. Picture taken January 27, 2021. REUTERS/Nick Zieminski/File Photo
NEW YORK (Reuters) - Investors looking to bet on the "meme stock" phenomenon that has characterized the retail trading boom may soon have a new way to do so, with the Roundhill MEME exchange-traded fund, which tracks an index made up of stocks trending on social media.
The ETF, which requires regulatory approval, will seek to track the performance, before fees and expenses, of the Solactive Roundhill Meme Stock Index, which in turn seeks to track the performance of "meme stocks," according to a filing on Thursday with the U.S. Securities and Exchange Commission.
Meme stocks include the shares and American depository receipts of companies that have a high level of mentions on social media, combined with high short interest, both of which indicate market sentiment, the filing said.
ETF providers have been jumping into the volatile meme stock frenzy, which peaked in January, when individual investors coordinated online through forums like Reddit's WallStreetBets, to drive shares of video game retailer GameStop Corp (NYSE:GME) up some 1,600% to punish short sellers who bet against it.
The VanEck Vectors Social Sentiment ETF, which is backed by Barstool Sports Inc founder Dave Portnoy, invests in stocks that are popular on social media and has gained 10% since its launch in March, underperforming versus the S&P 500's 19% gain during the same period.
FOMO, an active ETF launched by Tuttle Capital Management in March, also seeks to track companies with high social media sentiment, as well as special acquisition companies and cryptocurrency companies. It is up 2.5% since its launch.
The index components of MEME will be rebalanced every two weeks based on the level of social media attention and short interest, the filing said.
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